Double whammy blamed for property dip

The Real Estate Institute of WA has blamed interest rate rises and the proposed mining super profits tax for a slump in Perth house prices.

An R-P Data-Rismark survey shows Perth prices dropped 2.1 per cent in May, while prices in other capital cities rose 0.5 per cent.

REIWA president Alan Bourke said the combination saw buyers steer clear of the market.

"As a result of the April interest rate rise and also the May interest rate rise, the market got hurt and it has reacted in a negative fashion.

"Now that interest rates are off the radar we're starting to see, in June, we're starting to see activity improve."

Mr Bourke is predicting that buyers will start to move now.

"Buyers just don't like uncertainty in any sort of market and we saw interest rates, we saw the resources tax and we saw a little bit of European meltdown at the time so with all that uncertainty in the market a lot of buyers just tend to sit on the fence for a while."